Correlation Between Vanguard FTSE and First Trust
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and First Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard FTSE and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and First Trust Mid, you can compare the effects of market volatilities on Vanguard FTSE and First Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard FTSE with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and First Trust.
Diversification Opportunities for Vanguard FTSE and First Trust
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and First is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and First Trust Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mid and Vanguard FTSE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard FTSE Developed are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Mid has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and First Trust go up and down completely randomly.
Pair Corralation between Vanguard FTSE and First Trust
If you would invest 3,490 in First Trust Mid on August 29, 2024 and sell it today you would earn a total of 0.00 from holding First Trust Mid or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. First Trust Mid
Performance |
| Timeline |
| Vanguard FTSE Developed |
| First Trust Mid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Vanguard FTSE and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and First Trust
The main advantage of trading using opposite Vanguard FTSE and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, First Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Trust will offset losses from the drop in First Trust's long position.| Vanguard FTSE vs. Vanguard FTSE Emerging | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Value Index | Vanguard FTSE vs. Vanguard Small Cap Value |
| First Trust vs. First Trust Small | First Trust vs. First Trust Equity | First Trust vs. First Trust Emerging |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |